Cover for building, machinery, stock and fixture loss from earthquake, eruption, tsunami and aftershock — standalone or by endorsement. It supplements the natural-disaster risk excluded by ordinary fire and storm-flood insurance, strongly recommended for sites in south-eastern Korea (Gyeongju, Pohang) or near nuclear plants.
N2N Insurance Brokerage does not represent any single insurer — it independently represents the client as an FSS-registered broker (Reg. No. 2026-012201). We compare the wordings, rates and service of AIG · Chubb · DB · Hyundai · KB · Meritz to propose the cover and price best suited to your risk. Each insurer's full wording is provided at application and binding.
Cover for building, machinery, stock and fixture loss from earthquake, eruption, tsunami and aftershock — standalone or by endorsement. It supplements the natural-disaster risk excluded by ordinary fire and storm-flood insurance, and is strongly recommended for sites in south-eastern Korea (Gyeongju, Pohang) or near nuclear plants.
Gyeongju, Pohang, Ulsan, Busan.
BCP duty.
Semiconductor, display.
Large potential loss scale.
| Fire endorsement | Added to ordinary fire insurance |
|---|---|
| Standalone | A separate earthquake-only policy |
| All-risks combination | Included within property all risks |
| BI combination | Business-stoppage loss after an earthquake |
|---|---|
| Aftershock extension | 72-hour single-event definition |
| Incidental-cover combination | Fire, gas, electrical accident |
| Policy period | 1 year |
|---|---|
| Insurers | DB · Chubb · Hyundai (compared) |
| Sum insured | Building replacement value / machinery value |
| Deductible | 2–5% of sum insured or a fixed amount |
| Turnaround | 3–5 weeks (including reinsurance) |
If the insured event has already occurred at the time the contract is made, the contract is void. However, where the contract is void due to the company's intent or negligence, or where the company knew or could have known of the nullity before acceptance yet did not refund the premium, the company refunds the premium with interest at the policy-loan rate published by the Korea Insurance Development Institute, compounded annually, for the period from the day after payment to the day of refund.
The specific losses not covered (exclusions) are set out in each insurer's policy wording and product description; on this page, see the “Cover” tab(or the “Losses not covered” section) for the main exclusions. For other cover-specific grounds on which claims are not paid, please refer to the policy wording.
The company provides cover, in accordance with the policy, from the time it accepts the application and receives the first premium. Where the company accepts the application after receiving the first premium with it, cover also begins from the time the first premium was received.
The application must be completed by the policyholder, and the policyholder and the insured must sign it by hand. Failure to sign by hand may result in disadvantages regarding the validity of the contract. On an internet cyber-mall, an electronic signature may be used instead.
The policyholder has the right to be given and have explained the information needed about the product they wish to buy.
The insurer and N2N Insurance Brokerage must explain the important matters of the product to ordinary financial consumers.
When applying, the policyholder, the insured or their agent must disclose truthfully the facts they know regarding the questions in the application (including the questionnaire). Otherwise the claim may be declined or the contract cancelled. Where insurance is taken out by telephone or other means of communication, the duty is performed by answering the seller's questions, which are recorded, without a separate written questionnaire, so answers must be given with particular care.
If, after the contract is made, any of the following arises in respect of the subject-matter insured, the policyholder or the insured must notify the company in writing without delay and obtain endorsement on the policy.
The surrender value is the amount paid if the contract is cancelled early. Unlike bank savings, insurance combines risk protection and savings: part of the premium is paid out as claims to other policyholders who suffer accidents, and part covers the insurer's operating expenses, so the surrender value on early cancellation may be less than the premiums paid, or nil.
Under Article 59-4(1) of the Income Tax Act (special tax credit), for protection-type insurance taken out by an employee only, a tax credit of 12% of the premium paid (capped at KRW 1 million per year) is available. Tax matters may change with amendment or repeal of the relevant tax law.
Except as provided by law, the insurer and N2N Insurance Brokerage do not collect, use, inspect or provide personal data related to this contract — for its conclusion, maintenance and claim payment — without the consent of the policyholder, the insured or the beneficiary. However, for those purposes the insurer may, with the consent of the policyholder and the insured and in accordance with law, provide personal data to other insurers and insurance-related bodies.
The above is a summary and excerpt of the policy wording; for grounds on which claims are not paid and other details, please refer to the policy wording and product description.
Five areas of earthquake-risk exposure
Manufacturing, refining, chemical plants. The largest single-accident loss area.
11-storey+ buildings. Review a combination with the Fire Insurance Act special-building duty.
Generation, transmission, comms infrastructure. A high incidental-accident (gas, electrical) risk area.
Schools, medical institutions — special buildings under the Fire-Fighting System Act. Affected by the seismic-design grade.
Coast-adjacent facilities. A tsunami-risk combination area.
A manufacturing facility in an industrial complex experienced an intensity-5 earthquake. This wording has an intensity-5+ trigger clause, so cover was reviewed, and the building-structure loss and the incidental loss from a post-quake gas leak were handled within the wording. But as neighbouring sites were simultaneously affected, a limit-apportionment issue arose as the insurer applied the single-event definition (time/geographic scope), and the business-interruption loss was handled separately under a BI endorsement. A case showing that, an earthquake being a wide-area event, understanding the single-event definition and the limit-apportionment structure is key.
Source: (General industry example)
The wording and structure points decision-makers most often overlook
The cover-trigger intensity (4+, 5+, 6+) differs by wording. If the official intensity falls below the wording threshold, cover does not operate, so check in advance that the site's measurable intensity matches the wording trigger.
Incidental loss such as earthquake fire, collapse and gas accident is usually excluded by ordinary fire insurance. Reviewing whether this wording covers incidental loss, or needs a separate endorsement, is key.
An earthquake is a simultaneous, wide-area event, so where many nearby facilities are affected the insurer may apply the single-event definition (time/geography), causing limit apportionment. Design the limit on a wide-area scenario, not a single-accident assumption.
The questions decision-makers ask most when considering earthquake insurance
Ordinary earthquake insurance is voluntary, but for some special facilities (nuclear, national-core facilities) under the Earthquake and Volcanic Disaster Management Act and for special buildings under the Fire Insurance Act, an earthquake-endorsement combination is in practice effectively required. As earthquake frequency in Korea is rising, a review is worthwhile even where voluntary.
Usually covered: direct building/facility loss from an earthquake (direct shaking), tsunami and volcanic eruption, and the resulting incidental loss (collapse, fire, inundation). The intensity threshold differs by wording, with the cover trigger usually operating from intensity 4 upward.
The cover-trigger intensity differs by wording — intensity 4+, 5+, 6+. The official Meteorological Administration intensity applies, and cover and limit are decided by the measured intensity at the site location. A lower threshold means wider cover but a higher premium.
Incidental loss from an earthquake — fire, building collapse, gas leak, electrical accident — is usually in this wording's area. But ordinary fire insurance usually excludes earthquake-caused fire, so cover for loss from a post-earthquake fire needs this wording combined.
An earthquake occurs over a wide area and simultaneously, so the per-accident limit is often exhausted quickly. And as loss to adjacent buildings, roads and infrastructure is outside this wording, the limit design must consider the building replacement value + incidental loss + business-interruption potential together.
Policy-type storm-flood insurance is a natural-disaster wording run on government-subsidised premiums covering storm-flood + some earthquake, while this wording is earthquake/volcano-specialised. As the cover area and limit structure differ, a choice or combined design matched to the site's risk exposure is needed.
The insurer assesses it on the site's earthquake-risk grade, the building structure (whether seismically designed), the building value, the incidental-cover combination and the limit. The exact premium and acceptance are confirmed after underwriting by insurers such as AIG, Chubb, DB, KB, Meritz and Hyundai.
